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Buying health insurance and term insurance for your family? Know important aspects beforehand!

When it comes to protecting your family financially in case something happens to you, term and health insurance are the best choices. They provide the essential financial safety net that every individual and family should consider. However, most of us usually overlook the intricacies of these policies and understanding about them is essential while buying these two policies. In this article, we will be talking about the essential points about the term and health insurance so that your family is protected against unforeseen financial hardships. 

Important Aspects of Term Insurance

Term insurance is the basic type of insurance. Unlike other types of insurance available in India which also functions like investment in the form of payout, term insurance is the only form of insurance that doesn’t provide maturity benefit and due to which it comes with a modest premium. In other words, if the policyholder, unfortunately, passes away, the nominee will receive a death benefit. Due to the fact it comes with a low premium, it also allows the policyholder to invest in other types of investment possibilities, such as mutual funds that give both growth and capital appreciation. As mentioned in the introduction, let’s discuss the important aspects of the term insurance we sometimes miss while purchasing the plan!

  1. Determine the coverage amount: To decide on the amount of coverage you need for term insurance, you must understand and consider factors like:
  2. Age 
  3. Financial responsibilities
  4. Your family’s future financial needs.
  5. Your basic expenses that are being spent according to your lifestyle choices.
  6. Loans you are servicing today 
  7. Considering inflation and rising expenditures.
  8. Determine the policy period: The same can be understood by the following parameters:
  9. a) Based on your age: Primarily, you can choose your policy period based on your age. There is an adage that goes like “The younger you are, the longer the policy period” would be advisable. For example, if you are in your 20s, a term of 40 years or more is recommended and if you’re in your 30s, the policy tenure of 30 years or more is recommended. It is important to think carefully about the policy tenure because once it is determined, the premium will remain constant for the duration of the insurance. Usually, the insurance company provides term insurance coverage up to the age of 75-85 years. 
  10. b) Based on when you intend to retire: If you have a retirement plan, you can choose a policy period until you reach the age of retirement, which is typically 60-65 years for most individuals. This ensures that the coverage runs throughout your working years and that your family is financially secure in the event of the untimely death of an earning member. However, if you have not made any retirement plans, you should purchase the coverage for the maximum period. 
  11. c) Financial obligations: Depending on your other financial obligations and when they are due, you can choose the appropriate policy duration. For example, if you have a 30-year loan, it makes sense to buy term life insurance for at least 30 years to protect your family financially in the event of an unfortunate incident.
  12. Choose the correct insurer: With so many insurance companies offering various sorts of plans on the market, it is critical to select the insurance company that best meets your needs. When choosing an insurer, conduct some basic checks. Check their claim settlement ratio, solvency ratio, financial history, and market repute.

Just like we have listed down certain points to know beforehand when you are buying term insurance, similarly you need to certain aspects when you are buying health insurance plans in India

As we can see, medical inflation has reached an all-time high and with this, it has caused the healthcare bills to increase. In such circumstances, not having proper medical insurance for oneself and one’s family can be a significant financial burden. This is because medical difficulties occur unexpectedly and have a depressing effect on one’s morale, not to mention the financial instability it entails. This is where having medical insurance in India can be really beneficial. It will protect you from high medical costs and provide you with access to high-quality care.

However, there are various insurance firms in India that offer a variety of benefits like high coverage, lower premiums, maternity benefits, OPD coverage, speedy claim settlement, and so on. With so many options, how does one choose the best health insurance plans in India? So, here are some points to know beforehand:

To begin with, your employer’s insurance is inadequate: Nowadays many companies provide health insurance plans to their employees and one tends to assume that their benefits are enough. However, one has to understand the policy provided by the employer are not comprehensive and may not cover everything. While these corporate health insurance plans are undoubtedly beneficial, they are not always sufficient. These may or may not cover the employee’s dependents (spouse, parents, children, etc.).

Co-payment clauses: The goal of getting medical insurance in India is to get as much coverage as possible for health-related expenses. This is not the case when you get it via your company. They are designed to only cover a portion of your overall medical expenses; you will be responsible for the remainder.

Employment status: Company health insurance plans only cover an individual for the duration of their employment. When their employment is terminated (for whatever reason), their health insurance coverage ceases to exist.

One of the most significant disadvantages of a company’s health insurance plans is that it does not include post-retirement care, which is what everyone requires the most. Medical difficulties and the associated financial burden rise with age, as do the premium costs for health insurance plans.

When considering insurance options for your family, it’s crucial to understand the variety of plans available to ensure comprehensive coverage. One option to explore is limited indemnity medical insurance, which can offer a more flexible approach to managing healthcare costs. These plans typically provide a set benefit amount for specific medical services, making them a viable choice for those seeking predictable expenses. It’s advisable to compare limited indemnity plans to determine which best suits your family’s needs and budget. By doing so, you can make an informed decision that balances cost with the level of coverage required, ensuring peace of mind and financial security in the face of unexpected medical events.

So we are saying, 

We can understand that navigating the world of insurance can be overwhelming, especially with the options available around us. However, understanding the fundamental aspects of the term and health insurance plans is essential for making well-informed decisions. By carefully considering the factors such as coverage amount, and credibility of the insurance company. 

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